Correlation Between Axalta Coating and Insteel Industries
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Insteel Industries at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Axalta Coating and Insteel Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axalta Coating Systems and Insteel Industries, you can compare the effects of market volatilities on Axalta Coating and Insteel Industries and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Axalta Coating with a short position of Insteel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Insteel Industries.
Diversification Opportunities for Axalta Coating and Insteel Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axalta and Insteel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Insteel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insteel Industries and Axalta Coating is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Axalta Coating Systems are associated (or correlated) with Insteel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insteel Industries has no effect on the direction of Axalta Coating i.e., Axalta Coating and Insteel Industries go up and down completely randomly.
Pair Corralation between Axalta Coating and Insteel Industries
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 0.76 times more return on investment than Insteel Industries. However, Axalta Coating Systems is 1.32 times less risky than Insteel Industries. It trades about 0.06 of its potential returns per unit of risk. Insteel Industries is currently generating about 0.02 per unit of risk. If you would invest 2,563 in Axalta Coating Systems on September 14, 2024 and sell it today you would earn a total of 1,254 from holding Axalta Coating Systems or generate 48.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Insteel Industries
Performance |
| Timeline |
| Axalta Coating Systems |
| Insteel Industries |
Axalta Coating and Insteel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Insteel Industries
The main advantage of trading using opposite Axalta Coating and Insteel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Insteel Industries can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Insteel Industries will offset losses from the drop in Insteel Industries' long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Insteel Industries vs. Mayville Engineering Co | Insteel Industries vs. Gulf Island Fabrication | Insteel Industries vs. ESAB Corp | Insteel Industries vs. Northwest Pipe |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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